Global Ag News for June 23.23

TOP HEADLINES

Panama Canal Water Levels Expected to Impact US Grains

Issues with low water levels on the Panama Canal are expected to impact the travel of large vessels carrying US grain shipments, the USDA says in its latest Grains Transportation Report. The agency says that Panama is having its worst drought in over a century, and record-low water levels are possible by mid-July. As a result, restrictions on the size of vessels moving through locks of the canal are expected, which in turn is expected to slow the supply chain through there. “This restriction will affect the largest bulk vessels carrying U.S.-originated grain,” says the USDA. For the week ending June 15, total inspections of export grains were 1.16 million metric tons. This was down 26% from the previous week, down 40% from last year, and down 48% from the 3-year average.

FUTURES & WEATHER

Wheat prices overnight are down 8 1/4 in SRW, down 8 1/2 in HRW, down 5 1/2 in HRS; Corn is down 15 1/4; Soybeans down 20 3/4; Soymeal down $9.00; Soyoil up 0.38.

For the week so far wheat prices are up 43 in SRW, up 25 in HRW, up 22 1/2 in HRS; Corn is up 7 3/4; Soybeans down 24; Soymeal up $3.70; Soyoil down 3.73.

For the month to date wheat prices are up 136 1/2 in SRW, up 78 3/4 in HRW, up 96 1/2 in HRS; Corn is up 83 3/4; Soybeans up 172 1/4; Soymeal up $42.00; Soyoil up 7.99.

Year-To-Date nearby futures are down 7.8% in SRW, down 3.2% in HRW, down 7.0% in HRS; Corn is down 4.6%; Soybeans down 2.2%; Soymeal down 12.2%; Soyoil down 11.1%.

Malaysian palm oil prices overnight were up 62 ringgit (+1.74%) at 3624. China’s markets are closed for Holiday.

There were no changes in registrations. Registration total: 2,389 SRW Wheat contracts; 2 Oats; 0 Corn; 0 Soybeans; 1,076 Soyoil; 11 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of June 22 were: SRW Wheat down 7,794 contracts, HRW Wheat down 6,073, Corn down 2,034, Soybeans down 1,462, Soymeal down 6,616, Soyoil up 93.

Northern Plains: A slow-moving front is providing some strings of showers in the Northern Plains until a system goes through Saturday that is forecast to bring more widespread showers and thunderstorms. Ahead of this front, temperatures are hot with many areas eclipsing 90 degrees F in the eastern Dakotas. Temperatures should be more variable after the system moves through this weekend. Another system is forecast for next week that may bring widespread showers as well.

Central/Southern Plains: Heat has built in over Texas and has expanded north, a consistent feature until a system moves through this weekend, which will bottle the heat closer to Texas for next week. More rounds of showers and thunderstorms are forecast until that system moves through, and may even continue next week as well, most likely farther north. Conditions for developing corn and soybeans are dependent on rainfall frequency. Those areas with consistent rainfall are more able to withstand the heat stress.

Midwest: Hot and mostly dry conditions continue in the Midwest the next few days, sapping soil moisture and damaging corn in the expanding drought. A system spinning over the Southeast may spread some showers into eastern areas the next few days. Following that, a system will move through with more widespread showers and thunderstorms this weekend into early next week, and another system late next week or weekend to do something similar. Showers are going to be scattered and miss some key areas. Areas missing out are seeing stress increase for both corn and soybeans, though not all areas are dealing with harsh conditions. The coming rainfall is forecast to only be a stopgap in the poorer conditions, but the pattern does favor better chances for rain going into July. Whether or not the showers will be widespread or heavy enough are yet to be determined.

Delta: Several disturbances brought heavy showers and severe weather through the Delta last week. Though damage has been reported, the increased soil moisture is turning around dryness concerns. Though less active for the next week, there will be some additional chances for showers and thunderstorms in the region. If the frequency is too low, the concern over dryness will return.

Canadian Prairies: Even after recent rainfall, soil moisture in the Canadian Prairies is still reported to be low across much of the region, leaving some areas in need of rainfall. A front is active early Thursday across Manitoba, an area that has received some needed rainfall this week. Temperatures will be more pleasant as this system passes through, keeping stresses down for those drier areas. A front going through early next week is the next best chance at widespread showers in the region, though it is likely to be lighter. Isolated showers continue in the region afterward for at least some chance of precipitation heading into July.

The player sheet for 6/22 had funds: net buyers of 2,500 contracts of SRW wheat, sellers of 8,000 corn, buyers of 14,000 soybeans, sellers of 8,000 soymeal, and  buyers of 1,000 soyoil.

TENDERS

• RICE PURCHASE: South Korea’s state-backed Agro-Fisheries & Food Trade Corp. purchased an estimated 16,800 metric tons of rice largely to be sourced from Vietnam in an international tender for up to 62,200 metric tons which closed on June 8.
• FOOD WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 92,529 tonnes of food-quality wheat from United States, Canada and Australia in a regular tender that closed on Thursday.

PENDING TENDERS

• CORN TENDER: Algerian state agency ONAB has issued an international tender to purchase up to 120,000 metric tons of animal feed corn to be sourced from Argentina.
• RICE TENDER: The state purchasing agency in Mauritius has issued an international tender to buy 6,000 metric tons of long grain white rice sourced from optional origins.

 TODAY

 GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of five analysts; the USDA is scheduled to release its export sales report on Friday for week ending June 15.

• Corn est. range 00k – 800k tons, with avg of 338k
• Soybean est. range 300k – 800k tons, with avg of 506k

Argentine Soy, Corn, Wheat Estimates June 22: Exchange (Table)

The Buenos Aires Grain Exchange releases weekly report on website.

• 2022-23 soybean production estimate maintained
• 2023-24 wheat planting area est. at 6.1m ha

Argentina Corn Forecast Cut by 5.5% on Poor Yields After Drought

Poor yields, especially in Cordoba province, led Buenos Aires Grain Exchange analysts to trim their production outlook to 34m metric tons from 36m, according to a weekly report.

• Corn harvest is 44% complete
• NOTE: Argentina Corn Crop Estimate May Be Cut Again
• Dryness in western areas means farmers there won’t be able to plant wheat
• The exchange cut the national wheat area by 3.2% to 6.1m hectares (15.1m acres)

Slow progress of monsoon causing delay in sowing of oilseeds: SEA

The slow progress of monsoon has begun to worry all quarters, as the deficit between actual and normal rainfall has narrowed only slightly. However, the India Meteorological Department expects the monsoon to revive in the next few days, which would help it cover the entire country by the middle of July. On Thursday, the Solvent Extractors Association (SEA) in a letter to its members said that the slow monsoon was causing a delay in the sowing of oilseeds in the ongoing kharif season, which might impact production. Area sown to oilseeds remained low at 0.41 million hectares till last week, as against 0.48 million hectares in the year-ago period, it said. “The onset of monsoon in Kerala is delayed by a week and also the slow advancement of monsoon is leading to a delay in sowing in most of the states,” SEA President Ajay Jhunjhunwala said in the letter.

UN’s FAO Launches Program to Clear Ukraine Farmland of Mines

UN’s Food and Agriculture Organization is launching a program to clear mines from Ukrainian land so smallholder farmers and rural families can grow food, it said in a statement.

• FAO, World Food Programme will work with local communities and authorities to map lands using satellite: FAO
• De-mining teams will clear mines from land, prioritizing land that can quickly be cleared
• In third phase, soils will be tested for pollutants left behind by exploded weapons
• $100 million project is facing a funding gap of $90 million

France Starts Harvesting Wheat, Barley Crops: AgriMer

France started harvesting wheat and barley crops, according to data from FranceAgriMer.

• “Rain will improve moisture in central France, Germany, Poland, but dryness will continue in northwestern France and southern UK,” forecaster Maxar said in a note on Thursday

EU Plans to Lift Some GMO Rules to Help With Climate Change: FT

The European Union plans to lift controls on some genetically modified crops to help farmers cope with climate change, the Financial Times reports, citing a draft regulation it had seen.

• Proposes some modified plants should be approved as conventional rather than go through existing GMO regime that’s laborious and expensive
• Establish a category of plants that have used gene editing to create new varieties, but could have been achieved through traditional breeding techniques
• New techniques vital to maintain crop yields amid changing weather patterns
  • Would also reduce the use of pesticides, fertilizers and other chemicals
• Proposal could still change before it’s presented by the European Commission on July 5

US Corn Crops in Drought Area Jump to 64%: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending June 20, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought rose by 7 percentage points from the previous week to 64%
• At this time last year, 19% of corn crops were in drought

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